Posts tagged 'Personal finance'
A credit score, also known as a FICO® score, is a particular calculation of your credit history that measures your trustworthiness to lenders. It is a number that credit-givers, such as credit card companies and car dealers, use to help them decide if they want to loan you money, by answering the following questions: Can they expect you to be able to pay them back as agreed and what are the odds you won’t pay them back at all? What amount do they feel comfortable loaning you? How much do they want to charge you? The less confidence they have that they will be paid back, the more interest they will charge you.
In Fashionista terms, a credit score can be the difference between being granted VIP status or being shown the door at your favorite store or club. A credit score tracks whether you are more likely to be a good customer or a bad customer.
Think of your favorite store. If you visit it frequently, are nice to the staff, are enthusiastic about their merchandise, and avoid bad behavior such as shoplifting or always trying to pay less than retail, they will love you. They’ll put you on their VIP list, you’ll get first dibs on new selection, sales and discounts, they’ll call you ahead of time to let you know your favorites are in stock, and in many other ways, they will take extra special care of you. On the other hand, if you’re a complainer who’s rude to the staff, reluctant to pay retail, and constantly return items for no good reason, you’re unlikely to be welcome, and in fact, will probably be discouraged from coming at all. The golden rule works here: Treat the stores the way you want to be treated, and the good karma will come back to you.
You can guess where I’m going with this. The more you respect your credit score, the more lenders respect you in return. This becomes really important when you suddenly have some big ticket items you’re thinking about buying.
Your credit score is a number that is assigned to you by a credit agency; it is a snapshot of the credit risk they judge you to be at a particular point in time. Credit scores range from 300, indicating you’re a poor risk, to 850, indicating you’re a great risk and will be offered the best deals.
When you borrow money or apply for a credit card, you typically go to a bank or credit card company, which will immediately look at your credit score. How much money did you earn, and how much did you spend? How responsible were you? Did you honor your commitments and pay your bills on time? What is your current net worth? The more responsible you have been financially, the higher your score. And a high credit score means that you will be allowed to borrow more money at a lower interest rate than a person who has a lower credit score.
So if you’ve got a great credit score, you can buy your car or your house more cheaply than can someone whose credit score is lower. Why? Because, you will pay less interest. Less interest is your reward for having built up such a respectable credit score. (With the money you save on interest you’ll have more left over… for other things, such as designer clothes and footwear).
To find out your score, call any one of the three credit agencies listed below and ask for your credit report. By law, you are entitled to one free credit report per year. If you want to check it more than once a year, like when you are purchasing something big, then you’ll pay a low fee to get a second report.
Equifax: www.equifax.com (800-685-1111)
Experian: www.experian.com (888-EXPERIAN)
Trans Union: www.transunion.com (800-916-8800)
So how do you maintain VIP status with your credit score? Review the five factors the credit agencies use to score you and try to maximize your points in each category. Pay your bills on time. Have at least one credit card, buy a little with it every month, and then pay the bill in full. If you have debts, pay them down or off. It might take effort and time to improve your score, but it can be done.
April 23rd, 2009
2009 the recession years….
Carrie, having been downsized from Vogue, is working as a freelance editor. The decline in the publishing industry seriously crimped the advance on her fourth book. As a result, it was not nearly what she was expecting. Thank god she and Big did not take the pre-war penthouse – house poor is not fun. Big is still employed but she’s had to learn to look fabulous on a budget (buying So Many Shoes, So Little Money helped).
Samantha, savvy woman that she is, invested the earnings from her public relations company in cash equivalents weathering the economic crash nicely. Although business is slow, and most corporate events cut way back, managing Smith proved a boon to her standing and she still reigns atop the New York party and social scene. However, since she has cut down on the VIP lounges – bottle service is still not cheap. Although she keeps up with her hair and botox (fifty really is the new thirty) she has stopped most of her other high expense maintenance – and is banking the savings.
Miranda’s billable hours were cut back. She, Steve and Brady are getting by…Brooklyn really is cheaper than New York which would have been tricky to muster. Plus, now that Miranda has moved back home, they are saving on fortune by not maintaining two households and cutting back on her passion for Chinese take-out. She couldn’t believe how much take-out really added up. Yes, the lawyer now cooks. Steve handles home repairs (helping to keep expenses low) and Brady is in public school (although she would have preferred private).
Charlotte, Harry, Lily and Rose have also weathered the market. Divorces are on the rise so Harry’s practice is actually growing. Charlotte has started a successful breeding operation and Elizabeth Taylor has turned out to be quite fertile. But they are still watching things – they know that right now nothing is certain and things could change. With two kids to care for, a penny here really is a penny there. Carrie loaned her a copy of So Many Shoes and she’s found that shopping for classics really suits her style.
The girls still meet regularly at the dinner but have cut back a bit on the cosmos – and the shoes.
April 8th, 2009
You dream about what you’ll buy. (Maybe you can finally get that pony!) Or, what debts you’ll pay off. (“Credit Card Company, kiss my rear-end.”) The only fun thing about tax time is thinking about the refund check.
However, some of you – and I’m not pointing any fingers – are struck by “refund anticipation” disease. You sign a piece of paper and get an advance from your tax preparer on your refund check.
There is a serious side-effect from “refund anticipation” disease you may not realize: The advance loan comes with super high interest rates. Fortunately, there is a quick cure – don’t take out an advance against your tax refund. After all, why pay super high rates for borrowing your own money? Instead, simply wait for the check to arrive.
What if you need the money not for impulse shopping but because you really need it? Try as hard as you can to refrain. The high interest rates will cause you to fall further into debt – remember refund advances are short-term loans which are due and payable – high interest payments and all.
March 30th, 2009
Why is it, women can talk about ANYTHING with each other except money? We chat, chat, chat about everything except really important economic matters like how we are holding up in this recession, whether any area of our financial lives is out of control, or how we can use what is happening in the economy now to educate ourselves better.
Talking about money is key to understanding it – and understanding it is key to having more. So grab the girls, talk a walk (burn some calories and avoid spending cash on drinks) and talk about the economy or investing or money in general – you’ll be healthier, wealthier and wiser.
March 20th, 2009
What’s hot? What’s new? What’s now? What to buy? Keep? Store? It can be hard to stay in style. What’s the hottest fashion trend these days? Learning how to manage your money. Whether it’s getting out of debt, making and using a budget, or simply spending less and saving more – understanding personal finance, and the economy at large is totally in.
Fashionista Fact:
Economics is the new hot major on campus!
http://www.npr.org/templates/story/story.php?storyId=101321353
March 3rd, 2009
Finance, and therefore money, often gets a bad rap. Women who like money and want more of it are too often considered ambitious, greedy or gold diggers. However, having money can be a truly enjoyable – even life changing – experience. At its best, money is about freedom and choices, about having options and opportunities. It’s about being able to live the life you want to live in the way you want to live it. Money allows you to travel, to go to school, or to work at something that offers you full satisfaction, regardless of compensation, instead of being stuck in a job you hate just to pay the bills. Money gives you the freedom to choose whether to buy that Prada bag or the Gucci boots or, in a perfect world, both. Money allows you to be self-sufficient; with the confidence that comes with being independent and the freedom to make life choices that are right for you. It doesn’t guarantee all this, but it certainly ups the odds. It’s a means to an end we all aspire to.
So knowing how to manage your money is vital. There are a lot of decisions to make (student loans, buying a car, buying a house, how many pairs of shoes you can own without being obscene) which will rely on your having a basic understanding of your personal finances. Money can be cheap or expensive, depending on what you know about how to use it. For example, if you charge those Manolo Blahnik shoes – the ones you know perfectly well you can’t afford – to your credit card and don’t pay the bill in full when it arrives in the mail, the shoes become a lot more expensive than the original number that was on the price tag because of the interest the credit company charges.
I know many of you think finance is boring and that you are not good at math. But understanding the basic connects of money management is crucial – just look at the mess the economy is in. So please make an effort – I promise it will be worth it. (Especially when you are able to afford whatever it is you want without having to stress about when the credit bill is coming).
February 23rd, 2009
The devil put down his fiddle with glee – finance guys were going down. Musicians were back on the upswing and everyone knew women loved rock stars. Orchestrating the economic decline had been surprisingly easy. The inevitable finger pointing had begun in earnest. Experts were blaming consumers, liberals were blaming conservatives, conservatives were blaming liberals, and everyone was blaming bankers. Under immense financial stress and pressure, bankers weren’t treating their girlfriends’ right. Now they were out looking. Even the New York Times had weighed in: “It’s the Economy Girlfriend” (http://www.nytimes.com/2009/01/28/nyregion/28daba.html?em). His bet was that musicians were next in line. Who else could afford bottle/table service? Then he frowned, the last time he had made a bet he had lost his favorite golden fiddle – and he wanted to keep his hedge against the dollar falling.
February 11th, 2009
Blake sighed. She couldn’t understand why Justin kept calling. They had broken up weeks ago but he insisted on trying to work things out and desperately wanted to reconcile. Reconcile? She couldn’t even reconcile her checking account, let alone her relationship. Besides, she had started seeing a darling investment banker – although she had to acknowledge he was awfully uptight, what with the economy and all – which was getting on her nerves.
She decided to start with her checking account. If she could reconcile her money, Justin would be easy. Don’t know how to reconcile your checking account? Leave me a comment and I will send you easy to follow instructions.
February 5th, 2009
Starlets and their cell phones. Inseparable. Gossip? New movie deal? No, smart money management. Two new cell phone applications help you shop:
Lucky Magazine has created Lucky At Your Service which ties into stores’ inventories. The app featured over 70 shoes in its March shoe guide. Click “find it near you” and either GPS or a zip code can tell you which stores have what you’re looking for. The best part, it’s free. Download it at: http://corp.nearbynow.com/luckyatyourservice
ShopSavvy (www.biggu.com/applications) also acts as a personal shopping assistant. You scan an items barcode with your phone’s camera and the app shows you the lowest prices online and at nearby stores.
Even starlets need to save.
February 2nd, 2009
Cinderella stomped her foot. Where was her fairy godmother when she needed her? Marrying the prince had not turned out happily ever after and she had become quite short tempered. The monotony of palace life was bound to get on anyone’s nerves. She knew her shopping habit was out of control. Since it was her job to be the belle of the ball, and Manolo’s are so pretty, she had always been able to rationalize her purchases. Lately though she had begun to feel embarrassed. She had taken to putting her purchases into plain brown bags so the prince – and town people – couldn’t monitor her spending.
She knew she was overspending and if she didn’t start cutting back on expenses she would have to go back to work. Unfortunately, due to her limited skill set and education, that meant a return to the scullery.
She needed her fairy godmother to wave her magic wand and fix it all. After all, that woman could do anything. Then reality hit. Her fairy godmother had been cut in the last round of palace lay-offs. She was going to have to go it alone.
Rather than panic, she decided to do some homework and some financial planning. To begin she re-read some of the post from So Many Shoes – especially the ones on credit cards, interest rates and debt. She also turned to No Regrets for savings ideas. She vowed to get her financial life under control and to check back more often.
January 28th, 2009
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